Improvement in U.S. Employment with Slight Increase in Unemployment in November U.S. labor market data for November revealed the addition of 227,000 new jobs, exceeding expectations of 200,000 jobs.
The October report was revised to show an addition of 36,000 jobs instead of 12,000.
The unemployment rate rose to 4.2%, aligning with market expectations, compared to 4.1% in October.
Average hourly earnings saw a monthly increase of 0.4%, surpassing expectations of 0.3% and matching October’s growth rate.
On an annual basis, wages grew by 4.0%, exceeding expectations of 3.9% and aligning with October’s recorded growth.
These figures confirm the ongoing improvement in the U.S. labor market,
with increases in employment and wages despite the slight rise in unemployment.
China
China’s Central Bank Resumes Gold Purchases After a Six-Month Hiatus China’s central bank resumed goldpurchases in November after a six-month pause, despite record-high prices.
According to official data, the People’s Bank of China increased its gold reserves by 160,000 ounces, bringing the total to 72.96 million ounces.
The bank had consistently raised its holdings for 18 months until April, contributing to global gold price support.
The renewed buying reflects the bank’s strategy to diversify its reserves and hedge against currency value decline,
even as gold reached its highest-ever levels in October.
This surge was driven by demand as a safe haven amid geopolitical tensions in the Middle East and Ukraine,
and uncertainty leading up to the U.S. presidential elections.
Despite gold’s strong performance, prices saw some easing following Donald Trump’s election victory and a reduction in geopolitical tensions. Although gold has risen by approximately 30% year-to-date, consumer demand in China has softened,
with a decline in luxury goods like jewelry.
However, sales of gold bars and coins have remained stable as investors seek to protect their wealth amid economic weakness.
Dollar Rises for Fifth Day Ahead of Key Economic Data: The U.S. dollar continued rising for the fifth consecutive day as American traders returned from their holidays,
anticipating a busy week filled with economic data. On Tuesday, the dollar gained against most of its G10 peers.
U.S. Set to Impose Sanctions on Venezuelan Officials Over Maduro
The United States is preparing to impose new sanctions on
Venezuelan government officials in response to events during the re-election of Nicolás Maduro in July.
The Treasury Department is close to announcing individual sanctions against 15 officials linked to Maduro,
accusing them of “obstructing free and fair presidential elections,” according to documents seen by Bloomberg.
These measures target key leaders who the U.S. claims collaborated with Maduro to undermine the July 28 vote,
including members of the electoral authority, the Supreme Court of Venezuela, the National Assembly,
and the military and civilian intelligence services known as SEBIN and DGCIM.
These plans could be announced early this week and are subject to change before final approval.
Inflation in Switzerland Slows, Surpassing Expectations in August
On Tuesday morning, data from the Swiss economy
showed that the annual Consumer Price Index (CPI) rose by 1.1% in August,
below market expectations of a 1.2% increase and down from the previous 1.3% rise.
The CPI has been flat at 0.0% every month,
missing market expectations of a 0.1% increase but better than the last decline of 0.2%.
The data indicates weaker inflationary pressures,
supporting the likelihood of the Swiss National Bank cutting interest rates again this September for the third time this year.
Dollar Rises for the Fifth Day Amid Anticipation of a Busy Week of Economic Data
The U.S. dollar extended its gains for the fifth day as traders returned from their holidays
and anticipated a week packed with economic data releases.
The dollar gained against most of its G10 peers on Tuesday,
with the Bloomberg Dollar Spot Index rising by 0.1%.
In contrast, the Australian dollar was the weakest performer amid falling iron ore futures
and lower-than-expected GDP inputs.
Investors are looking ahead to several key U.S. economic reports,
including manufacturing data due today, service sector data on Thursday,
and the main non-farm payroll report on Friday,
to assess whether expectations for a more accommodative Federal Reserve policy are justified.
One in four swap market participants believe the Fed will cut rates by over 25 basis points this month.
Dollar Rises for Fifth Day Ahead of Key Economic Data
The value of the dollar stabilized below its three-month high on Thursday,
as investors awaited the Federal Reserve’s decision on interest rate cuts,
while central bank officials continued to assess inflation data released on Tuesday.
Inflation data in the United States fueled expectations that the Federal Reserve would cut interest rates for the first time mid-year.
The data showed a 3.1% rise in the Consumer Price Index in January, surpassing expectations of a 2.9% increase.
Currently, the market anticipates a 77% probability of no interest rate cut in March, compared to previous expectations indicating a rate cut at that time.
Market expectations suggest a 60% likelihood that the Federal Reserve will keep interest rates unchanged at its May meeting.
Gold
Gold prices stabilized near their lowest level in two months during Thursday’s trading.
This comes as investors reassess comments from officials at the U.S. Federal Reserve regarding higher-than-expected inflation in January,
reducing expectations for rapid and significant interest rate cuts this year.
On the other hand, the U.S. Dollar Index maintains its position near a three-month high, making gold more expensive for buyers using other currencies.
Regarding interest rate trends, Federal Reserve Vice Chair for Supervision, Michael Barr, expressed support for a “cautious approach” to interest rate cuts advocated by Fed Chairman Jerome Powell. However, Chicago Fed President Charles Evans warned against delaying interest rate cuts for an extended period.
British Growth
Positive British Growth Data
Data released on Thursday morning by the UK’s Office for National Statistics revealed a 0.1% month-on-month decline in the country’s Gross Domestic Product in January. This figure outperforms market expectations, which anticipated a 0.2% economic decline.
The previous reading for December showed a 0.3% growth.
Simultaneously, the data indicated an 0.8% increase in manufacturing output in the UK during January, surpassing market expectations of a 0.1% decline.
Despite this, it represents an improvement from the previous reading, which showed a 0.4% growth in December.
The Federal Reserve kept the federal funds rate unchanged at its highest level in 23 years,
ranging between 5.25% and 5.5%, for the fourth consecutive meeting in January 2024, in line with expectations.
Policymakers added that it would not be appropriate to cut interest rates until they have greater confidence that inflation is sustainably moving toward 2%.
During the press conference, Chairman Powell stated that it would be appropriate to begin interest rate cuts at some point this year,
but the central bank would continue to make decisions on a meeting-by-meeting basis and did not consider a cut in March likely.
Meanwhile, the Federal Reserve removed the signal for further interest rate hikes from its statement,
stating that the risks to achieving employment and inflation goals are moving toward a better balance.
However, it indicated readiness to adjust the monetary policy stance as needed if risks hinder the achievement of these goals.
The central bank noted that inflation had eased over the past year but remains elevated.
The US Dollar
The US Dollar Index has returned to its dominance against a basket of major currencies,
following diminished expectations that the Federal Reserve would start cutting interest rates in the coming March.
It remains committed to returning inflation to the target level of 2%.
Statements from the more hawkish Federal Reserve officials have strengthened the upward momentum of the US dollar,
with markets now seeing a 62% chance that the Fed will keep interest rates unchanged,
according to the CME Group’s Fed Funds Rate futures tool.
As a result, the dollar index rose by 0.24% to 103.66 points, leading to declines in other major currency pairs.
US Stocks
Decline Amid Investors’ Anticipation of Corporate Results.
US stock indices fell after Federal Reserve Chairman Jerome Powell stated that inflation remains higher
than the US Federal Reserve’s target and hinted that it may not be appropriate to decide on an interest rate cut starting from the March meeting.
This raised market expectations of the Fed keeping interest rates for a longer period than anticipated.
However, investors are eagerly awaiting corporate results, given the presence of a strong consumer according to the latest data on the US Consumer Confidence Index. Strong company results are expected at a time when markets are reaching historical highs.
It is important to monitor market data on Friday, which is expected to have a strong impact on the movements of the US dollar and stocks as well.
Expectations indicate the addition of only 175,000 jobs in January,
lower than the previous month’s 216,000 jobs, and the unemployment rate is expected to remain unchanged at 3.7%.
It is worth noting that in case of readings higher than employment expectations and an unemployment rate below 4.0%,
it will be positive for the dollar and negative for stocks, as interest rates are expected to remain high for an extended period.
Eurozone inflation data determines the future of EUR/USD
Germany, a major player in the eurozone, is preparing to release inflation data for September,
which is expected to reveal a 4.5% year-on-year rise in the Consumer Price Index (CPI).
These data are expected to significantly influence the monetary policy decisions of the European Central Bank (ECB). If inflation is higher than expected, the central bank may have to raise interest rates further, which could weaken the value of the euro.
In contrast, if inflation is lower than expected, the central bank may be more willing to take a more flexible stance, which could lead to an appreciation of the euro.
In addition to inflation-related data, the future of the EUR/USD will also be affected by the following factors:
Divergent monetary policy of the US Federal Reserve and the European Central Bank: The US Federal Reserve raises interest rates faster than the European Central Bank, creating wide interest rate differentials. This tends to strengthen the US dollar against the euro.
Eurozone recession risk: If the eurozone recession risk worsens, it could lead to a decline in the value of the euro.
Trade Balance: The euro has a strong competitive advantage, which supports the value of the currency.
Conclusion
Eurozone inflation data is expected to remain pivotal to the future of the EUR/USD. If inflation is higher than expected, this could cause the value of the euro to weaken. If inflation is lower than expected, this could cause the value of the euro to rise.
Eurozone inflation data determines the future of EUR/USD
GBP/USD struggles amid record U.K. wage growth and rising unemployment
The Pound Sterling (GBP) is grappling with a difficult situation as it struggles around 1.25 against the US Dollar (USD) despite a record wage growth in the UK. The GBP/USD rate continues to hover just above 1.25 following the release of UK jobs data which revealed an increase in unemployment, alongside another fresh record high in wage growth.
The UK unemployment rate rose to 4.3%, meeting expectations, and up from the previous 4.2%. However, wage growth, including bonuses, rose to 8.5% in the three months leading up to July, a significant increase from the previous 8.2% in the three months to June. Wage growth excluding bonuses also rose to 7.8%. These figures indicate that earnings are increasing at a record pace, outstripping inflation and boosting individuals’ purchasing power.
The Bank of England (BoE) finds itself in a tight spot with the robust UK labor market ahead of next week’s interest rate decision. The central bank is under pressure to raise interest rates further due to increased inflationary pressure on the economy.
Catherine Mann, a member of the BoE Monetary Policy Committee known for her hawkish stance, signaled that she would likely support another interest rate increase and urged officials to “err on the side of tightening to prevent further persistent inflation from crystallizing.” However, instead of rising on this prospect, the pound is struggling with the potential negative impact of another rate hike on the economy in the second half of the year.
Dollar details
Meanwhile, the US dollar (DXY) is gaining ground, reversing some of yesterday’s losses as investors anticipate Wednesday’s inflation data. The data is expected to show that inflation rose again in August, although core inflation is predicted to have cooled further.
In related news, the EUR/USD is falling towards 1.07 ahead of German ZEW economic sentiment data. The European Central Bank (ECB) also finds itself on a knife-edge ahead of Thursday’s rate decision, with investors doubting whether the central bank will be able to raise rates for a tenth time amidst widespread signs of an economic downturn. The US dollar is reversing yesterday’s losses as it awaits inflation data on Wednesday, with no high-impact U.S. economic data expected to be released today.
What is Fueling the Rise in Gold Prices? Gold prices are skyrocketing in the market. In 2021 and 2022, the rise in gold prices was significant, with analysts expecting it to go up further in 2023.
The demand for gold is increasing and this is contributing to its increasing price. This article will look at why the gold rate is rising and what factors are responsible for this phenomenon. We will examine various bullion market trends that have a direct impact on gold rates and their effect on investors worldwide.
Firstly, the global pandemic has had a significant impact on the economy, leading to uncertainty and instability.
In times of uncertainty, investors tend to turn to gold as a safe-haven asset that retains its value.
This has led to an increase in demand for gold, which in turn has caused the price to rise.
Secondly, the US dollar has weakened in recent times, which has made gold more attractive to investors.
This is because gold is priced in US dollars, and a weaker dollar means that gold becomes cheaper for investors holding other currencies.
Thirdly, central banks around the world have been increasing their gold reserves.
This has also contributed to the rise in demand for gold, which has led to an increase in price.
Finally, geopolitical tensions and trade disputes have also contributed to the rise in gold prices.
These factors have led to uncertainty in the markets, causing investors to seek refuge in gold.
For investors, the rise in gold prices presents an opportunity to diversify their portfolios and protect their wealth.
Gold is a great hedge against inflation and economic uncertainty, and as such, can provide stability to an investment portfolio.
In conclusion, the rise in gold prices reflects the uncertainty and instability in the global economy.
Investors can take advantage of this by diversifying their portfolio with gold, which can provide stability and protection against the economy.
Why are Gold prices increasing?
The recent increase in gold prices can be attributed to several factors. In 2021 and 2022, investors were drawn to gold as a safe-haven asset due to the uncertainty caused by the global pandemic. Additionally, the low-interest rate environment has encouraged investors to buy gold as a hedge against inflation. Finally, geopolitical tensions have also been keeping gold prices high in 2023.
These combined factors have contributed to the recent rise in gold prices.
Additionally, Gold has soared to heights unseen in the past decade due to a combination of global events, central bank purchases, and retail investor buying.
Events such as inflation, geopolitical tensions, and stock market uncertainty have driven the gold market to its current position. Central banks bought nearly $70 billion of gold in 2022, an all-time high since 1950, further driving up prices.
India too has seen gold prices hit record highs, with a price of INR 60,000 per 10 grams of gold as of March 21, 2023.
With gold’s dramatic increase in price, it is difficult to determine whether investors should buy now in anticipation of higher returns or wait for the market to cool down. Market experts have provided their insights into how gold is expected to perform and what investors should expect in 2023.
Banking Sector Fears and the Significant Impact on Gold Prices
Increasing banking sector fears have played a significant role in the recent spike in gold prices. Speculators’ net long position in COMEX gold has climbed by 67,047 lots since late February, to 106,955 lots, according to CFTC statistics.
This is owing to the belief that the Fed is not far from its peak fed funds rate, which was the outcome of speculators raising their positions after last year and the beginning of this year.
Nevertheless, there is still room for speculators to increase their positions owing to the Fed’s likely flip as banking sector concerns persist and signs of inflation lessen. Throughout difficult times, gold has been a safe-haven asset, and its price is rising as investors seek its stability.
What is the impact of Credit Suisse merging with UBS Group? The news that Credit Suisse Group AG and UBS Group AG are merging has sent shockwaves through the European banking sector.
Credit Suisse’s Merger Leaves Investors with Questions and Uncertainties
As part of the agreement, Credit Suisse’s riskiest bonds will be wiped out,
causing investors to take a hit in this quarter-trillion-dollar market.
According to Switzerland’s financial regulator Finma, about 16 billion Swiss francs
or $17.3 billion of additional tier 1 bonds will be completely written off
as part of the merger agreement between these two banks.
This announcement has caused significant concern among investors
who were previously invested in these risky bonds issued
by Credit Suisse Group AG before their merger with UBS Group AG.
This move is likely to have far-reaching consequences for the entire European banking sector,
leaving many investors in a state of uncertainty about their future holdings.
It could also lead to further consolidation among banks across Europe
as they try to make up for lost revenue and protect themselves against potential losses due to this crisis.
At this stage, it remains unclear what long-term effects such drastic measures
will have on the stability of Europe’s financial system or whether other banks
may follow suit to reduce the risks associated with holding risky assets like those held by Credit Suisse
before its merger with UBS Group AG.
What we do know however is that these events are sure cause serious disruption throughout
Europe’s banking industry could take months if not years before being fully resolved.
Considering all this, investors should remain vigilant
when making any decisions regarding investments in European banks
during these tumultuous times; seeking professional advice from qualified advisors
where possible can help ensure you minimize your exposure while still taking advantage
of opportunities present within markets affected by such dramatic changes.
The Collapse of Credit Suisse: A Tale of Regulatory Hurdles
This failure triggered a severe sell-off in shares of both banks and other banking stocks across Europe
as investors worried about the potential for further instability in the global financial system.
To stabilize markets and protect customers’ deposits, Swiss authorities have pushed
for UBS to take over its smaller rival following plans for Credit Suisse
to borrow up to 50 billion francs ($54 billion) ultimately fell through.
The takeover would provide much-needed liquidity support
while also allowing regulators greater oversight over potentially risky investments by Credit Suisse.
Under normal circumstances such an arrangement would be difficult
due to regulatory hurdles surrounding mergers between two large institutions;
However, these are not normal times which has made it easier for regulators
on both sides of Switzerland’s borders with Germany and France more amenable towards
such a solution given their need to ensure stability within their respective countries’ economies too.
Saudi National Bank Loses Billions in Credit Suisse Disaster
The news of Credit Suisse’s failure and UBS’ subsequent purchase of $3.2 billion has hit Saudi National Bank hard, with the bank nursing major losses on its investment in the Swiss lender.
As Credit Suisse’s largest shareholder, holding a 10% stake in the company worth 1.4 billion Swiss francs ($1.5 billion),
Saudi National Bank is now facing an 80% loss on its investment due to UBS paying only 0.76 Swiss francs per share as part of their rescue deal – far below what it had invested at 3.82 Swiss francs per share just last year.
This significant discount highlights regulators’ efforts to stabilize global banking systems following a series of collapses such as Silicon Valley Bank and First Republic bank, which led to major stock price downturns across international banking sectors over recent weeks.
Fortunately, while this news comes as a blow for Saudi National Bank, steps have been taken internationally towards restoring confidence within global markets through initiatives such as quantitative easing policies implemented by central banks around the world – allowing companies access to much-needed liquidity during these difficult times and providing some respite from current market volatility surrounding investments like those made in Credit Suisse before its fall from grace.
Considering all this, investors should remain vigilant when making any decisions regarding investments into European banks during these tumultuous times; seeking professional advice from qualified advisors where possible can help ensure you minimize your exposure while still taking advantage of opportunities present within markets affected by such dramatic changes.
The price of crude oil is still down from its peak at around $75 per barrel,
leaving many countries in the region with reduced revenues due to lower exports.
This has caused some volatility within their respective stock markets
as investors are uncertain about what will happen next regarding global demand for energy resources and how it will affect their economies going forward.
At present, most economists believe that there is no immediate risk of an economic crisis
but they do advise caution when investing in Gulf equities during this period of uncertainty.
Investors should look closely at companies’ financials before making any decisions regarding investments
in these stocks so that they can better assess potential risks associated with them given current market conditions.
Additionally, it would be wise for those looking to invest in these stocks
to diversify across sectors instead of putting all eggs into one basket by only investing in energy-related
companies or those exposed directly or indirectly through supply chains related thereto
such diversification may help reduce overall portfolio risk while also allowing one access
to potentially higher returns if certain industries perform well despite challenging macroeconomic conditions globally
or locally within a particular country/region.
Overall, though, although things may seem grim right now due
to low prices and recessions worries weighing heavily upon us all;
experts agree that there are still opportunities out there for savvy investors
who take the time necessary to research potential investments carefully before taking action,
so long as you remain vigilant about your investment decisions then you might just find yourself reaping rewards come 2021!
Preparing for the Economic Storm
As we enter the new year of 2022, investors around the world are facing several worries as they brace for what is to come.
One major concern is whether we will experience a recession this year or not.
With crude demand and interest rates on the rise, it’s no wonder
that stock markets across the Gulf region have been mixed today after enjoying gains throughout last year.
It’s hard to predict exactly how these factors will affect global economies over time but one thing remains certain,
now more than ever before businesses need to be prepared for anything
and everything that could happen in 2021-22.
This means taking steps such as diversifying portfolios
and investing wisely so that you can weather any storm if it does hit us during this uncertain period.
In addition, many experts suggest keeping an eye on global developments
and local news related to economic stability so you can stay ahead of potential market conditions or trends that may arise from them.
By doing your research now, you can ensure that your investments are protected
should something unexpected occur down the line, make sure your financial future stays secure even when times get tough!
Overall, while there may be some cause for worry about what lies ahead this coming 2021-22 fiscal year due to rising crude prices and other external forces beyond our control; with careful planning & monitoring, smart investors should still be able to find success despite these current challenges!
The Gulf Cooperation Council (GCC)
The Gulf Cooperation Council (GCC) countries are in the direct line of fire when it comes to Federal policy moves.
This is because five out of the six GCC nations have their currencies pegged solely to the US dollar, and they tend to broadly match US monetary steps.
The sixth nation – Kuwait – has its dinar linked to a basket of currencies that is believed by many analysts and observers as being heavily dominated by the greenback.
These currency pegs mean that any changes or fluctuations in American monetary policy can directly affect these GCC countries’ economies, making them particularly vulnerable during times when there may be instability or volatility about international exchange rates.
As such, it’s important for those living and doing business within this region to understand how potential Fed moves could affect their day-to-day operations as well as long-term investments plans – both domestically and abroad – so they can better plan accordingly should anything arise from Washington DC which could create economic shockwaves throughout this area of Middle East/North Africa (MENA).
Fortunately, however, despite being tied closely together with America through these currency pegs; most members states within this council also maintain close relationships with other key players around the world too like China & India who often offer alternative sources of stability during uncertain times which helps mitigate some risks associated with depending on one single economy for all financial matters related decision-making processes.
All things considered though; understanding how US Monetary Policy might impact your life here remains an essential part of staying ahead curve on regional market trends & developments going forward!
The Fed’s Final Rate Hike, On Wednesday, Federal Reserve Chair Jerome Powell took an aggressive stance at the podium and effectively said that the central bank isn’t done hiking rates.
This is a stark contrast to what many in the markets have been expecting lately,
that there would be a so-called Fed pivot soon.
It appears this will not be happening anytime soon, as Powell made it clear that he believes further rate hikes
are necessary for continued economic growth and stability.
The Fed’s decision to keep raising rates has sent shockwaves through financial markets,
with stocks falling sharply on Wednesday following his comments.
The reaction from investors was swift; however, many analysts believe these moves
may simply represent short-term volatility rather than long-term shifts in sentiment
or outlooks on monetary policy going forward.
It remains uncertain how far along into 2019 we can expect rate hikes before any sort of pause occurs,
but one thing is certain: if you’re looking for yield right now then you should look elsewhere
because interest rates aren’t likely coming down anytime soon!
Powell’s statement serves as yet another reminder of why it pays off to stay informed
about key economic indicators like inflation levels and employment numbers when making decisions about your investments;
after all, knowledge really is power! So don’t forget to do your research
before jumping into any new investment opportunities,
especially ones involving fixed-income assets like bonds
or CDs which are more sensitive to changes in interest rates than other asset classes such as equities or commodities.
How Investors are dealing with higher volatility
Powell was hawkish up and down the line. In other words,
he wasn’t backing down from his stance on monetary policy despite what the market wanted to hear.
This has caused quite an uproar in markets across the globe as investors are struggling
to make sense of this new reality where central banks aren’t playing by their traditional rules anymore.
Investors were hoping for some sort of pivot from Powell but instead,
they got more hawkishness which has made them wary about investing further
into stocks or bonds due to fears that inflation could be around the corner if interest rates stay too low for too long.
It’s clear that there is no easy answer here – investors can either take their chances with higher volatility or wait out until something changes at The Fed before making any big moves with their money. Either way, it looks like we’re going through some turbulent times ahead as markets try to adjust themselves accordingly while still trying to grapple with these unpredictable policies coming out of Washington DC!
The Fed’s Path to Certainty
The markets seemed to remain relatively flat following Fed Chair Jerome Powell’s speech this week. This could be seen as a sign that investors are set on a particular narrative, and they’re not interested in being swayed by any new information.
For the most part, it appears that the market is comfortable with its current trajectory and has no interest in taking risks or making large moves based on what was said during Powell’s address. The fact that there wasn’t much of an immediate reaction suggests people feel confident about where things are headed for now at least.
This stability is good news for investors who want to avoid volatility when investing their money, but it also indicates something else: certainty from the Federal Reserve regarding future monetary policy decisions and economic outlooks. Wright sees this as positive because it means people have more faith in what will happen next — which can give them peace of mind when making long-term investments or financial plans going forward into 2021 and beyond.
In short, while markets may have remained relatively flat through Powell’s speech, suggesting investor confidence isn’t easily swayed, Wright believes this steadiness should be viewed positively since it implies growing certainty surrounding Fed policies moving forward; ultimately giving everyone involved greater clarity over their own investment strategies.
A Hard Landing for the US Economy
The Federal Reserve has been watching the US economy closely, but it appears their predictions may be off. Even if markets seem to think otherwise, longtime Fed watcher Wright said he believes that a hard landing for the US economy is unavoidable.
This is an alarming thought given how well assets have been performing lately and how this could lead to further economic stimulation. Powell noted yesterday that unemployment most likely needs to increase before we can see any real cooling of our current economic situation – however with markets doing so well, businesses are unlikely to want or need to let go of employees for this decrease in employment rate to happen.
It’s clear then that there’s still much uncertainty surrounding what will actually happen with the US economy going forward and whether or not a hard landing is inevitable despite market optimism at present time – something which no doubt worries many investors out there too! We must hope then that some kind of solution can be found which allows us all to avoid such an outcome as best as possible; only time will tell on this one though.
But the more the market ignores the Fed, the longer the Fed will have to keep monetary policy restrictive, which ultimately raises the odds of a recession.
“Markets are pretty confident that we will get inflation under control, ” Powell said Wednesday, adding that Fed governors aren’t considering an adjustment to the 2% inflation target. “We’re certainly highly confident we can do that.”
